Thailand FTA Promises Early Benefits for Australian Exporters

Trade Minister Mark Vaile today welcomed approval by Parliament of the Thailand-Australia Free Trade Agreement (TAFTA).

Parliament has passed implementing legislation to allow TAFTA to enter into force on 1 January 2005. Bipartisan support for the FTA highlights the importance of this agreement to Australia's exporters.

"TAFTA is a major market opening agreement which will make a substantial contribution to Australian business, to Australian jobs, and to our engagement with countries in our region," Mr Vaile said.

"Australian exporters will benefit from the significant reduction of Thailand's tariffs across all sectors and will gain improved access to the second largest and one of the fastest growing economies in South-East Asia.

"Under TAFTA, more than $700 million of current Australian exports to Thailand will obtain immediate tariff cuts, while the savings on Thai customs duties are expected to be around $100 million in the first year alone.

"TAFTA will eliminate more than half of Thailand's 5,000 tariffs - accounting for nearly 80 per cent of Australian exports. By 2010, 95 per cent of all current trade between Australia and Thailand will be completely free.

"Many Australian companies formerly locked out of the Thai market by high tariffs and quotas will enjoy new opportunities, particularly in areas such as agriculture, processed foods and beverages, mining and automotive products.

"TAFTA will bring significant improvements in business mobility and access for Australian services exporters and investors in the Thai market. Thailand has agreed to relax a number of its restrictive conditions relating to visas and work permits and will guarantee non-discriminatory treatment of Australian investments in Thailand.

"Thailand will also relax foreign equity restrictions in a number of sectors of interest to Australia, including mining, certain construction and distribution services, and management consultancy and hospitality services, Mr Vaile said."

Trade between Australia and Thailand continues to grow. In 2003-04, Thailand was Australia's 12^th largest trading partner. Two-way trade was worth $6.1 billion.

Contact: Matthew Doman (Ministerial) 02 6277 7420 - DFAT Media Liaison 02 6261 1555